Is the FTC a Hero or Villain to Developing the Metaverse?

"The FTC is acting as an unlikely guardian of a free and properly decentralized metaverse, which I did not have on my Web3 crypto bingo card (LUNA and SBF were also missing.)"

The FTC has been taking on major organizations that have their eyes set on dominating the metaverse as it forms. This could be seen as stifling innovation and major investment in the metaverse, but what if we put a different spin on it? Is the FTC upholding the fundamental crypto ethos?

“We can’t define the ‘metaverse’ yet, but we can sue people about it. Early Web3 is nothing if not fascinating.” I wrote this back in July when the FTC sued Meta over a play to monopolize the metaverse and VR. The filing claimed that Meta had the ultimate goal of “owning the entire metaverse”, which seems as difficult to prove as it is to disagree with.

Meta in recent years has set its sights on building, and ultimately controlling, a VR “metaverse.” One need look no further than the rebranding of the company from Facebook to “Meta” in 2021 to understand its vision—and its priorities—for the future. And Meta is serious about its goals: it has become the largest provider of VR devices and apps to customers in the United States.

Case 3:22-cv-04325

Now, the FTC has a new target in its sights: the $69 billion acquisition of Activision Blizzard by Microsoft.

FTC Aims to Block Microsoft Acquisition of Activision Blizzard

Photo by Ian Hutchinson on Unsplash

The acquisition of Activision Blizzard by Microsoft made some gamers uncomfortable. Activision Blizzard has some of the most beloved game franchises, including World of Warcraft, Call of Duty, Diablo, and Overwatch. Although there are unquestionably many upsides to this flagship acquisition — Activision Blizzard making many missteps with its incredible line-up of games contributed heavily to the upside — the reservations from gamers were the same as the FTC’s: anti-monopoly concerns. You can read the full complaint by the FTC here.

Microsoft has already shown that it can and will withhold content from its gaming rivals […] Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.

Holly Vedova, Director of the FTC’s Bureau of Competition

The issue is that Microsoft’s $69 billion acquisition would yield an unfair level of control over the games industry and that by withholding content, Microsoft would harm competitiveness which is a net loss for the industry and gamers alike. But, what does this have to do with blockchain gaming, Web3, or the metaverse?

Well, in the announcement of Microsoft’s intention to acquire Activision Blizzard, it was made clear that the metaverse is a crucial component of the record-breaking move.

Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.

— Satya Nadella, Microsoft CEO

This attempted block, if successful, would by extension stifle some of Microsoft’s plans to develop the metaverse. Given the positive press about the deal from the Web3 sector — ourselves included — FTC’s move could be classified as anti-metaverse or at the very least detrimental to its formation. But is it?

FTC: Hero or Villian of the Metaverse?

The title of this article does the age-old tactic of making the issue a black-and-white dichotomy, when realistically, the FTC is neither hero nor villain to the metaverse. Nevertheless, there has already been some backlash from folk in Web3 who worry how this might impact major institutional investment and progress for the foetal metaverse. My first reaction was of similar concern, but is the FTC unknowingly upholding the fundamental crypto ethos?: That no one entity controls the decentralized space.

The FTC’s move against Meta was unambiguously to halt a monopoly on VR and the metaverse, with the two being intrinsically linked in Meta’s mind. Although I believe Mark Zuckerberg and Meta to be painted as cartoon villains, I wouldn’t want them to have even a sizeable share of control over the metaverse based on Facebook’s inappropriate harvesting of user data — something that must not repeat in Web3.

The FTC’s attempt to block Microsoft’s acquisition of Activision Blizzard feels less about the metaverse than the lawsuit against Meta, but it could have the same effect — albeit potentially unintended. The FTC is acting as an unlikely guardian of a free and properly decentralized metaverse, which I did not have on my Web3 crypto bingo card (LUNA and SBF were also missing.)

Here’s to an equally surprising but markedly more positive 2023.

Lead image made in part with a photo by Brian Penny from Pixabay

Robert Baggs
Robert Baggs
Full-time professional crypto writer and Editor of Token Gamer. Co-host of the Mint One Podcast. Obsessed with MMOs. London based. Primary holdings: WAXP, ENJ, & BTC. Secondary holdings: ETH, GALA, & MATIC

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